February 16, 2012

Jobless and Taking the "Disability Option"

Marc Comtois

Glenn Reynolds points to a Republican Study Committee graphic that asks, "Where Are the Jobs?".

The above chart shows the “labor force participation rate.” This statistic represents the share of working-age Americans who are either employed or unemployed but looking for work. It is not a pretty picture. Only 63.7% of working-age Americans are currently in the workforce – the lowest in almost 29 years!

To put it another way, 36.3% of working-age Americans do not have a job and are not even looking.

What are they doing--how are they surviving--if they aren't working? Well, according to Art Cashin, evidently they are going on disability. According to a report from JPMorgan:
...increases in the number of disability benefits recipients account for about a quarter of the decline in employment participation. Furthermore during recessions the number of new disability claims actually increases, even though the number of jobs with higher injury incidence (such as construction) generally declines. Try explaining that one... Half of the benefit recipients suffer from "mental disorders" and "musculoskeletal disorders" (such as back pain). "Mood disorders" alone account for over 10% of this group. And once someone starts receiving these benefits, it's almost impossible to take the off the program. In 2011 only 1% of the recipients lost their benefits because they were no longer deemed disabled. So how much is this program costing the US taxpayer? Apparently quite a bit.
And a paper (PDF) by David Autor of MIT (summarized by Art Cashin):
Autor attributes disability's expansion mainly to liberalized, more subjective eligibility rules and to a deteriorating job market for less-educated workers. Through the 1970s, strokes, heart attacks and cancer were major causes. Now, mental problems (depression, personality disorder) and musculoskeletal ailments (back pain, joint stress) dominate (54 percent of awards in 2009, nearly double 1981's 28 percent). The paradox is plain. As physically grueling construction and factory jobs have shrunk, disability awards have gone up.

For many recipients, the disability program is a form of long-term unemployment insurance, argue Autor and his frequent collaborator Mark Duggan of the University of Pennsylvania. Benefit applications surge when joblessness rises. From 2001 to 2010, annual applications jumped 123 percent to 2.9 million. On average, recipients start receiving payments at age 49 and keep them until 66, when they switch to Social Security's retiree benefits.

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Where's A-Hole in chief Russ with a bloc quote to prove that what this Really means is that Obamanomics rush to bankruptcy is the best thing sine sliced bread?

Posted by: Tommy Cranston at February 16, 2012 2:23 PM

The United States is a very generous place. Sometimes people just have to get a little creative with ethical standards to take advantage of its generosity.

Posted by: Dan at February 16, 2012 3:45 PM

Michael - Should we assume that these disability awards are all legitimate as well, or is that level of deference only reserved for those of us who wear uniforms and badges during our careers?

Posted by: Dan at February 16, 2012 3:49 PM

I have a friend who has the same exact neck injury that I do. We both have the same issues, with similar severity. When he was injured, he quit his job, filed a lawsuit, and applied for disability. When I got mine, I kept working. He just got his settlement, so he's off on a multi-year road-trip in his truck. I'm still here working.

Slipping into dependency isn't glamorous, but the standard of living isn't very different from working full-time for $10-12 an hour, from what I can tell. Except that when you work you have to, you know, work.

If we're going to be the kind of society that refuses to allow people to go homeless or starve, then we're going to also have to make working more attractive than the social safety net, or else we'll continue this trend. A nice solution would be to make the system slightly less generous and boost minimum wages to a level that provides a more appealing lifestyle than dependency.

Posted by: mangeek at February 16, 2012 5:47 PM

Despite what progressives think, reasonable minds can differ on whether government should be caring for permanently disabled or out-of-work-through-no-fault-of-their-own persons. I don't prefer this option, but a society can function that way. Suffice it to say that I am not in favor of "letting people die." There are other ways.

Where reasonable minds cannot differ is on whether government assistance should be mechanical, anonymous, and "dignified" for the recipients. It should be none of these things. There should be a number of hurdles and safeguards to ensure that only those who truly need it to survive (not live comfortably) receive it. And it *shouldn't* be dignified to receive it because it can only continue to function if people want to get off of it. This is the natural human mechanism for preventing abuse. We're talking about paying people to sit around and produce nothing - something that could easily crush a society if not kept strictly in check (see e.g., Providence) - so this is really not so much to ask.

Posted by: Dan at February 16, 2012 9:07 PM

" Half of the benefit recipients suffer from "mental disorders" and "musculoskeletal disorders" (such as back pain)."

i.e., disorders which are either very broadly defined and, therefore, easy to qualify for or very difficult to prove or disprove via empirical tests and examinations.

Once again, a gov't program implemented or expanded with compassion and all good intentions has turned out to be a budget buster.

Posted by: Monique at February 16, 2012 9:19 PM

As the society becomes more disabled both literally and figuratively the liberal Democrat base becomes broader. This is a main objective of handouts, entitlements,etc. New voting blocks are created. The "benefits" maintain them.

Posted by: ANTHONY at February 16, 2012 10:51 PM

A little history, make of it what you will. My former wife worked in SS disability in the 70's. My percentages may not be exact, but here is what I remember.

Approximately 20% of applicants were approved. A favorite reason for denial was that they could still "read blueprints". A letter from a politician, usually improved your chances. Your file was marked "PI", meaning "Political Inquiry". If denied, an appeal resulted in obtaining benefits about 70% of the time. Legal ads on TV indicate this is still the case.

The employees amused themselves by imitating Wasserman's Gait. I don't have an exact figure, but an amazing number of the employees seemed to "go berserk". By this I mean that they would stand up and begin screaming, frequently coupled with throwing things against the walls.

Posted by: Warrington Faust at February 17, 2012 12:30 AM

When we stop fighting amongst ourselves and begin to think for ourselves, and work on solutions rather than proving one or the other idealogy is correct we will begin to make progress.

There is a line, one that if crossed invites hardship and fear into a populace that is dependent on government services, and will do anything to remain on the dependent side of the equation. I do not blame them. The current conditions make it impossible for a person to earn over the government set threshold into self reliance. To make, say-$35,000 a year, I'm not sure of the actual number, takes a persons government sponsored health care, their food stamps, their heating assistance, their earned income tax credit, their cell-phone assistance and their free bus pass away.

$35,000, or whatever the numbers are is not even close to being enough to pay rent, buy health insurance, eat healthy foods and pay for insurance on a cheap car that will need repairs.

The missing link? The eroding middle class. It's happening right before our eyes while we point the finger at the "other side."


Posted by: michael at February 17, 2012 12:43 PM

Michael - What is your evidence that the middle class is "eroding"? Not an attack, just curious.

Posted by: Dan at February 17, 2012 1:43 PM

It's just a hypothesis used to further the conversation. I have no facts, graphs or data. I do, however sense an increasing desperation from people whose income does not meet their expenses, or even come close.

Posted by: michael at February 17, 2012 2:44 PM

A personal story... When I was in my early and mid twenties, I suffered from crushing bouts of depression. I had been laid off from work and had taken a leave of absence from my college classes because of it. It was awful and I was working hard with a doctor and my family to get it sorted out and the lack of employment and fact I had dropped out of school was a source of intense guilt and shame. A friend had suggested to me that I could probably qualify as being "disabled" and thus could collect a check and maybe even go to school for free when I was ready to return. I was absolutely horrified by the suggestion. For me, I was temporarily knocked down and was fighting to get back up and resume my "normal" activities. I realize that some people with mental illness are much worse off than I was, but with proper treatment, it should not be a "lifetime disability."

Posted by: Bucket Chick at February 17, 2012 8:17 PM
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